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  • Katherine Powers

Why Investing in Real Estate Makes Sense

Investing in Real Estate makes sense to me. It always has. It always will. To what degree depends on the individual. I’m not going to sit here and tell you that it is ALWAYS a good investment, or that EVERY piece of property is a good investment; and I am certainly not going to tell you that if you had, like me, jumped on the Real Estate bandwagon at the top of the bubble in 2007 that you would be sitting pretty reaping all your gains. Nothing that offers the possibility of a reward is without risk. When considering adding real estate to your long-term financial plan, consider this:

Historically speaking, real estate values go up. The national average of home prices has increased by 4.2%, even accounting for the increase in the average size of homes. At this rate, home prices have at the very least kept up with inflation. Since that is the national average, you can certainly look at certain regions and show larger (or smaller) gains.

However, your home can be considered a forced long-term savings plan because each mortgage payment may include a portion of principal pay down, and the actual value of the home will usually keep pace with inflation. Ideally, at some point in the future, your mortgage gets paid off so that your total monthly payment is much lower than the cost to rent a similar house.



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